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To: Bald Eagle who wrote (9031)	1/20/1998 11:30:00 AM
From: Moonray	Respond to of 25814

Japanese groups cut chip output by 20 percent The Financial Times Leading Japanese semi-conductor manufacturers are scaling back production and capital spending plans because of a fall in the price of computer chips and the economic slowdown in Japan. Hitachi, one of the top five Japanese semiconductor makers, said it would cut production at eight domestic plants in an attempt to stem losses in its memory chip business. The company plans to halt production for between four and seven days a week in February and March, cutting output by about 20 percent. The decision stems from a sharp downturn in the memory market that has seen the price of 16-megabit dynamic random access memory chips plunge about 60 percent since the beginning of last year. Hitachi's move is highly unusual -- semiconductor manufacturers generally try to keep facilities running constantly as it takes considerable time to restart production. Yoshiharu Izumi, industry analyst at UBS Securities in Tokyo, estimates Hitachi is losing $15 million to $22 million a month in its semiconductor business. Hitachi's cuts follow Mitsubishi Electric's plans to close one of its U.S. facilities, where it manufactures lower value-added 4-megabit D-RAMs. This is believed to be the first closure of an overseas semiconductor factory by a Japanese company. Meanwhile, Fujitsu, another leading semiconductor maker and Japan's largest computer manufacturer, said it was considering scaling back its capital investment plans by about 30 percent. Toshiba has postponed the construction of an advanced facility in southern Japan that was expected to start this year Meanwhile, NEC, Japan's leading semiconductor maker and the second largest in the world after Intel of the U.S., is consolidating production of 16-megabit D-RAMs at its U.S. facility. The company will no longer produce 16-megabit D-RAMs in either Japan or Britain, where production costs are higher. Analysts expect the largest Japanese semiconductor makers to report a second year of losses in their semiconductor businesses this financial year, with the exception of NEC. o~~~ O